Australian police say they have foiled a terrorist attack in the final stages of its preparation, after 16 people were arrested in Sydney and Melbourne.

New South Wales police chief Ken Moroney said a "potentially catastrophic attack" had been averted.

One suspect was shot and wounded during a raid in Sydney. Chemicals, weapons, and computers were seized, police said.

The operation came nearly a week after Australia's anti-terror laws were changed to give police greater powers.

Police raided 23 houses in Sydney and Melbourne early on Tuesday, as part of the country's largest ever counter-terrorism operation.

The raids involved about 500 police officers and followed a 16-month investigation, officials said.

"I'm satisfied that we have disrupted what I would regard as the final stages of a large-scale terrorist attack, or the launch of a terrorist attack," Mr Moroney told Australia's ABC radio.

Court appearances

Those arrested in Melbourne include Abu Bakr, an outspoken Algerian-Australian cleric who has in the past praised Osama Bin Laden as "a great man".

He was among nine men who appeared in court in the city on Tuesday, and were charged with membership of a "terrorist organisation".

Each of the members of the group are committed to the cause of violent jihad
Richard Maidment
Prosecutor

Prosecutor Richard Maidment told the court the men had formed a terrorist group to kill "innocent men and women in Australia".

He claims they received military-style training in rural Australia and had discussions about bomb-making.

Those arrested in Sydney are also due to appear in court.

"The members of the Sydney group have been gathering chemicals of a kind that were used in the London Underground bombings," Mr Maidment said, adding that Abu Bakr was the ringleader of both the Melbourne and Sydney groups.

Police said one of the suspects in Sydney was shot and seriously wounded after they came under fire. They said the suspect had refused orders to surrender.

There was no immediate comment from those arrested.

US ally

Police declined to give details of the likely target of the attack, but Victoria state police chief Christine Nixon said next year's Commonwealth Games, to be held in the city, were not a target.

Prime Minister John Howard said the arrests vindicated the government's decision to rush through amendments to the anti-terror laws.

"This country has never been immune from a possible terrorist attack," he said in a televised news conference.

"It's important that we continue to mobilise all of the resources of the commonwealth and the states to fight terrorism."

The changes were enacted on Thursday, to make it easier for police to prosecute suspects believed to be planning attacks.

Mr Howard at the time said he had received credible intelligence of a "terrorist threat".

Australia is a key ally of the US in its "war on terror", and has sent troops to fight in Iraq and Afghanistan.

There has never been a major terrorist attack on Australian soil, although 88 Australians died in the 2002 Bali bombings, and Australia's embassy in Indonesia was bombed in 2004.

Interesting that last week as the Govt were rushing through the amendment to the law necessary to make these arrests there was a degree of winging by some members on this site about draconian laws and loss of rights. The Chief Commissioner of Victorias Police says the Commonwealth games were not a target. With 110,000 people packed into the MCG watching the Games I hope they are not a target but it gives me a warmer feeling knowing that the security services can act early to ensure that risk is reduced.

Good point Neuro. His 'band of brothers' didn't register too highly on the scale of street smart. The Bill passed last week only gained momentum when the PM sated publically that this group of fanatical bearded wonders was planning an attack and he needed the Bill to stop them. The terrorists cheerfully chose to ignore this loud public warning thinking that surely he meant another group and continued on with their preparations.

Unfortunately, because the attack had not been executed most will be up for 10 years although the wankir who tried to shoot the Police and was himself shot will likely serve Her Majesty longer. On the day of release they and their families should have their citizenship recinded and they should be deported back to the shit hole they originally escaped, seeking the safe and quyiet life in Australia. Maybe this will prove a deterent to asperant suicide bombers, knowing that their families will be held accountable for their actions.

Now if Johnny Howard could arrange for a few Illegal Immigrant boats to be torpedoed before Friday it will set the weekend up nicely.

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On the day of release they and their families should have their citizenship recinded and they should be deported back to the s*** hole they originally escaped, seeking the safe and quyiet life in Australia.

This will be interesting to revisit. Its always a bit suspciious that the arrests are timed so close to the bill. Also nice timing to announce this when chummy Blair needs all the support he can to push through a 90 day detention bill.

I am not familiar with the Bill, but does it by any chance give powers to arrest people whithout charging with a specific crime or applying somelower level of proof??

If you were plannign a terrorist act would youreally include someone visibly unpopular and identifuiable as a "Abu Bakr, an outspoken Algerian-Australian cleric ?"

This is worth revisiting in 3 months to see what progress is actiually made -or is it like some of the British operations a nicely timed stunt?